March 31st, 2008

Mugabe's rule of 28 years supposedly ened as Movement for Democratic Change led by Morgan Tsvangirai got 58% of vote.

INR: Last day of financial year RBI pushed up spot to print a fix of 39.97; stocks down 4% on expectations of tightening
SGD: MAS policy on 10Apr , should remain rangebound from 1.3780 - 3820
THB: More outright buying pushed up offshore curve and spot

SEC appearing to end FASB 157 or mark-to-market accounting; companies required to use fair market value, unless that value is the result of a forced liquidation or distressed sale

March 27th, 2008

Thai FM is revising forecast for '08 growth to 5.0-6.0% from 4.5-5.5% b/c better consumer confidence and inflation.

South African inflation calls for SARB rate hikes but wouldnt address the problem as inflation isnt demand driven

Mboweni was resistant to Eskom's original request for 18% hike in tariffs, hasnt responded to 60% hike proposal

March 26th, 2008

ZAR: inflation up to 9.4% from 8.8% for first time in 5 years, adding to pressure for CB to hike rates.
- SARB wants to keep inflation b/w 3-6% target range.
- Rands 15% drop against USD plus higher electricity tariffs are increasing price pressures, after leaving unchanged 31Jan should hike next month
- key components were gas prices hiked by govt by 2.3% and food prices which were up 14.3% in Feb vs. 13.6% in Jan
- if food and gas continue to rise will increase wage demands as growth being dampened by already high rates and global slowdown
- Mboweni said he will take whatever action to anchor inflation and doesnt see oil prices likely to decline soon

Hang Seng closed up 6.43% in single biggest day since Jan '08 on Monday night
SGD: IP for Feb up 10.0%, easing from 12.8% in January; electronics sector gaining traction

RUB: should see Russia's economy grow at 6.8% in '08, driven by domestc demand, which should support liquidity

March 25th, 2008

HKD: Inflation much higher than expected at 6.3% with surge in rents, food inflation, and strengthening CNY
Massive selloff in USDKRW, from 995 to 976 with return of risk appetite
INR: Stocks up 5% currency down from 40.20 to 40.00
THB: spot hit high of 31.72 just before 11am fixing, daily funding once again at a discount
- current ruling party seeking an amendment to constitution to prevent breakup of entire political party if one member found guilty of electoral fraud
SGD: CPI overnight at 6.5%, trade ministry still holding 4.5-5.5% forecast
- oil prices still at high but property sector looks to be cooling sligthly; GST effect wearing off in July and global slowdown should ease commodity inflation
- after steepening the slope in October MAS probably will avoid another hike especially with expectations lower in H2

Saudi Arabia moved into 2nd place as crude supplier to the US, inching ahead of Mexico but still way behind Canada, then Venezuela, then Nigeria

March 19th, 2008

China tightened monetary conditions by raising reserve requirements to 15.5% up frm 15%

USDTHB heading lower mainly on exporter sales, look for 31.00
SGD: break of 1.3738 low should extend to 1.3695, above 1.3880 look for 1.3925

ZAR
- fell against USD on speculation importers are selling the ccy; any sign of ZAR strength will be met by importer buying as fundamentals are still ZAR negative
- c/a deficit narrowed from 25yr high of 8.1% in 3rd qtr to 7.5% of GDP
- retail sales up 0.2% in Jan, first gain in 3 months; prior to November number had been positive every month since Feb 2001
- SARB raised rates 0.5% to 11% on 06Dec to fight 8.8% January inflation (outside 3-6% comfort zone for 10th straight month)
- Mboweni comments that weaker ZAR will prolong inflationary period; ZAR depreciation is reflective of c/a deficit but strong commodity prices and rates should prevent further depreciation; c/a deficit is 'comfortably financed by inflows'; Eskom situation is caused by cheap energy caused

March 11th, 2008

The Mississippi primary and i've been sick for days. Misery but hopefully spring is around the corner.


Thai govt mulling its own SWF to invest part of $100bn in FX reserves in high-risk securities with initial investment around 5-10bn.
- argument is stronger the THB becomes, the easier it will be to find cheap and value assets
- Thai economy is made up with 73% exports
Fed decision to inject $200bn in longer term money in to global banking system
- Fed MO appears to be announcing big decisions in hour or two before stock opening; Aug 17th rate cut, 12Dec TAF (Term Auction Facility)
23Jan 75bp suprise cut, all an hour or so before
- Commodity prices higher as Fed action was very inflationary as increased liquidity is necessarily inflationary;


KRW: higher on March dividend repatriation, lower KOSPI and outflows from foreigners sale of their stakes in Korean companies
CNY: "most volatile day in history" NDF cutve collapsed and everyone came out to sell
PHP: well bid on risk aversion even with USD getting crushed; 41.45 close
SGD: all-time low of 1.3785 before MAS stood up

- a common bourse will be created b/w 6 ASEAN members (Malaysia, Vietnam, Indonesia, Philippines, Singapore, and Thailand) in order to increase the visibility of ASEAN as an asset class

"it would be a metastatic cancer on the body economic"

March 5th, 2008

- China National Population and Family Planning commission announced making "incremental changes" to current policies

- Fiscal spending which starts 01Oct in Thailand expected to require an 8% spending increase under the assumption that GDP at 5.5% and inflation at 3%

-

March 4th, 2008

So while the world around me appears to at this point not be in as much chaos as i once assumed, my trading is certainly experiencing its greatest challenge in my career. A disastrous week away, getting the Thailand decisions completely wrong, etc. has left me down for the year as of the beginning of March. Hopefully now i can bunker/hunker or however you want to say it, down, and start achieving some success. I think the main thing is I need to just get excited about this job again, bring back the enthusiasm that's necessary.

Game time.

- RBA hiked rate by 25bp to a 14yr high of 7.25% but language suggested could be end of tightening cycle
- Prime Minister Rudd said a "double blow" for consumers
- India's largest bank ICICI disclosed large subprime losses (largest private sector bank) which pushed stocks down 8% at one point
- FX swaps in HKD softened after end of China Railway Construction IPO ends on March 5th
- HKD inflation will be a huge problem from USD peg / CNY appreciation, as most goods from China + oil prices
- Temasek auctioning off 56% stake in Bank International Indonesia to comply with Indonesia regulation that prohibit foreigners from owning controlling stake in more than one bank (they already control Bank Danamon at 68%)

ZAR
- Vehicle Sales fell overnight for 11th straight month (annual 12%) with higher IR hurting demand; consumer demand driven indicators should not show too much effect as market already well aware of effects of SARB tightening cycle
- with inflation exceeding banks 3-6% range since April, has raised rates 4 times to 11%
- Currency enjoying support from dollar-propelled rally in commodities
- Weak macro factors (c/a deficit, electricity cap, inelastic labour market)
- Weak political factors: Zuma's end of honeymoon with Cosatu and SACP, made evident by SACP's all-out attack on ANC budget policy
- SACP staunch enemy of SARB's inflation targeting regime and of Treasury's conservative discal policy
- this will be a factor in 6 months when Zuma is on criminal trial will need all the political support he can get so could relax conservative monetary views
- with GDP high, credit extended and high inflation + energy crisis hurting mining jobs in H208, if Zuma tinkers with Treasury or SARB to address job losses, market will sell off SA assets